A Mobile Money shop closed.
Kampala, Uganda | THE INDEPENDENT | Mobile money companies have announced the full restoration of services following nearly a week of restricted access to cash. However, the disruption has raised several questions, including the reasons for the service interruptions during the election period and the regulatory framework governing mobile money.
The service blockage coincided with an internet shutdown, which was later eased three days ago to affect only social media and messaging apps. While announcing the internet restrictions, UCC Executive Director Nyombi Thembo explained that the move aimed to “curb misinformation, electoral interference, and incitement during a sensitive period,” assuring that essential services would remain protected.
The public, however, accused UCC of also blocking mobile money services, particularly withdrawals at agents, leaving millions of users frustrated. Some customers reported being limited to just three transactions per day. According to MTN Uganda, which holds slightly over half of the mobile money market, an average of UGX 8 billion in transactions occurs daily, with 80% being amounts of UGX 60,000 or less. This highlights the extent to which a large portion of the population relies on mobile money platforms for daily transactions.
When asked about the interruption in mobile money services, the UCC ED stated that his organization does not regulate the industry, pointing instead to the Bank of Uganda (BoU). UCC Spokesman Ibrahim Bbossa said in a text message, “The issues surrounding mobile money withdrawals are best explained by the Bank of Uganda, the regulator. It was a miscommunication to suggest that UCC issued that instruction. The Commission regulates the communication platforms, not the financial services.”
The National Payments Systems Act 2020, which separates financial services and communications into distinct regulatory frameworks, places mobile money regulation under the Bank of Uganda. Despite this, telecom companies cited UCC directives as the reason for restrictions. MTN, for instance, stated in a brief message before the blockade was lifted: “The restrictions are still in place as per UCC directive. There is no defined timeline for full restoration at the moment.”
On January 18, UCC announced that general public internet access had been fully restored as of midnight, including web browsing, access to news websites, educational resources, government portals, financial services, email, and other essential online activities.
CIPESA (Collaboration on International ICT Policy for East and Southern Africa) condemned the UCC’s actions, noting that blocking social media, messaging services, and mobile money withdrawals forced citizens to cross the border to Kenya to access their funds by transferring money to mobile wallets and cashing it there.
Lawyer Philip Byarugaba criticized the UCC directive on both internet and mobile money as illegal and unconstitutional, stating that the regulator cites no specific law for its actions. He questioned: “Under what legal authority are you restricting our constitutional rights to expression (Art 29), information (Art 41), and livelihood (Art 40)?”
Social media users also questioned the rationale behind the mobile money disruptions. One X user, Andrew Luta, asked: “If social media was the problem, why are mobile money services, banking platforms, ride apps, and emergency digital services still unstable or inaccessible? Who exactly are these services ‘misinforming’?”
Another user questioned how withdrawing cash from an agent posed a threat to national security. Similarly, another asked whether UCC was now in charge of mobile money, including the deposit protection fund, instead of the Bank of Uganda.
Uganda Communication Commission’s Spokesperson, Ibrahim Bbossa, however, said issues surrounding mobile money withdrawals can be best explained by the Bank of Uganda, the regulator. ” It was miscommunication to suggest that UCC issued that instruction. The Commission regulates the communication platforms, not financial services, he said.
An IT expert attached to a security agency, who spoke on condition of anonymity, suggested that the mobile money disruptions were linked to the internet shutdown. He explained: “While voice calls and basic SMS generally remained functional, mobile money relies heavily on data connectivity for transactions like transfers, withdrawals, and payments via apps or USSD codes that require network data.”
He added that telecoms such as MTN and Airtel imposed temporary limits per regulator directives—such as caps on withdrawals (UGX 500,000 per transaction, daily limits of UGX 1.5 million) and restrictions on person-to-person transfers—even after the internet was restored.
The expert explained that while basic mobile networks can support simple transactions, cash withdrawals at agents typically require real-time connectivity to the mobile money platform’s servers to verify balances, authorize transactions, deduct funds, and generate confirmation codes or SMS notifications.
Similarly, using apps like MTN MoMo or Airtel Money requires internet access to initiate or manage withdrawals. During the shutdown, mobile money agents reported intermittent system downtime, preventing cash-outs. Withdrawals were particularly affected due to the higher fraud risk associated with real cash leaving the system, necessitating stricter real-time checks that fail without reliable internet connectivity.
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